Instructions for Form 1120-C (2006)

Instructions for Form 1120-C - Introductory Material

This is archived information that pertains only to the 2006 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.

Table of Contents

New form for subchapter T cooperatives. All subchapter T cooperatives, including farmers' cooperative associations, should file Form 1120-C, U.S. Income Tax Return for Cooperative Associations, for tax years ending on or after December 31, 2006.

Energy efficient appliance credit (Form 8909). The energy efficient appliance credit (Form 8909) can be taken by producers of appliances which meet the requirements of section 45M.

Federal telephone excise tax. Cooperatives that paid the federal telephone excise tax on long distance or bundled service may be able to request a credit. See the instructions for line 29g.

Certain food inventory and qualified book contributions extended. The larger deduction for contributions of certain food inventory and qualified book contributions to certain schools has been extended through December 31, 2007. See the instructions for line 17.

Records of cash contributions. Cash contributions made in tax years beginning after August 17, 2006, must be supported by a dated bank record or receipt. See the instructions for line 17.

Filing address change. The filing address for cooperatives whose principal business, office, or agency is located in a foreign country or U.S. possession has changed. See Where To File.

New form for controlled groups. Subchapter T cooperatives who are controlled groups must complete the new Schedule O (Form 1120), Consent and Apportionment Schedule for a Controlled Group, before completing Schedule J, Tax Computation. For more information, see the Instructions for Schedule O.

Form 8817 obsolete. Form 8817, Allocation of Patronage and Nonpatronage Income (Rev. 01-1998), is obsolete for tax returns due on or after December 31, 2006. Schedule G of Form 1120-C replaces Form 8817.

Photographs of Missing Children

The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in instructions on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.

Unresolved Tax Issues

If the cooperative has attempted to deal with an IRS problem unsuccessfully, it should contact the Taxpayer Advocate. The Taxpayer Advocate independently represents the cooperative's interests and concerns within the IRS by protecting its rights and resolving problems that have not been fixed through normal channels.

While Taxpayer Advocates cannot change the tax law or make a technical tax decision, they can clear up problems that resulted from previous contacts and ensure that the cooperative's case is given a complete and impartial review.

The cooperative's assigned personal advocate will listen to its point of view and will work with the cooperative to address its concerns. The cooperative can expect the advocate to provide:

A “fresh look” at a new or ongoing problem.
Timely acknowledgment.
The name and phone number of the individual assigned to its case.
Updates on progress.
Time frames for action.
Speedy resolution.
Courteous service.

When contacting the Taxpayer Advocate, the cooperative should be prepared to provide the following information.

The cooperative's name, address, and employer identification number (EIN).
The name and telephone number of an authorized contact person and the hours he or she can be reached.
The type of tax return and year(s) involved.
A detailed description of the problem.
Previous attempts to solve the problem and the office that was contacted.
A description of the hardship the cooperative is facing and verifying documentation (if applicable).

The cooperative can contact a Taxpayer Advocate by calling 1-877-777-4778 (toll free). Persons who have access to TTY/TDD equipment can call 1-800-829-4059 and ask for Taxpayer Advocate assistance. If the cooperative prefers, it can call, write, or fax the Taxpayer Advocate office in its area. See Pub. 1546 for a list of addresses and fax numbers.

How To Make a Contribution To Reduce Debt Held by the Public

To help reduce debt held by the public, make a check payable to “Bureau of the Public Debt.” Send it to Bureau of the Public Debt, Department G, P.O. Box 2188, Parkersburg, WV 26106-2188. Or, enclose a check with the income tax return. Contributions to reduce debt held by the public are deductible subject to the rules and limitations for charitable contributions.

How To Get Forms and Publications

Internet. You can access the IRS website 24 hours a day, 7 days a week, at www.irs.gov to:

Download forms, instructions, and publications;
Order IRS products online;
Research your tax questions online;
Search publications online by topic or keyword; and
Sign up to receive local and national tax news by email.

IRS Tax Products CD. You can order Pub. 1796, IRS Tax Products CD, and obtain:

Current-year forms, instructions, and publications;
Prior-year forms, instructions, and publications;
Bonus: Historical Tax Products DVD - ships with final release;
Tax Map: An electronic research tool and finding aid;
Tax law frequently asked questions (FAQs);
Tax Topics from the IRS telephone response system;
Fill-in, print, and save features for most tax forms;
Internal Revenue Bulletins; and
Toll-free and email technical support.

The CD is released twice during the year. The first release will ship at the beginning of January and the final release will ship at the beginning of March.

Buy the CD from National Technical Information Service at
www.irs.gov/cdorders for $25 (no handling fee) or call 1-877-CDFORMS (1-877-233-6767) toll free to buy the CD for $25 (plus a $5 handling fee). Price is subject to change.

By phone and in person. You can order forms and publications by calling 1-800-TAX-FORM (1-800-829-3676). You can also get most forms and publications at your local IRS office.

IRS E-Services Make Taxes Easier

Now more than ever before, businesses can enjoy the benefits of filing and paying their federal taxes electronically. Whether you rely on a tax professional or handle your own taxes, the IRS offers you convenient programs to make taxes easier.

You can e-file your Form 7004; Form 940 and 941 employment tax returns; Form 1099 and other information returns. Visit www.irs.gov/efile for details.
You can pay taxes online or by phone using the free Electronic Federal Tax Payment System (EFTPS). Visit www.eftps.gov or call 1-800-555-4477 for details.

Use these electronic options to make filing and paying taxes easier.